Bitcoin miners have dramatically increased their debt from $2.1 billion to $12.7 billion in just one year as they invest heavily in new mining rigs and artificial intelligence (AI) infrastructure to maintain their competitive edge in the global hashrate race, according to investment firm VanEck.
Without ongoing investment in cutting-edge hardware, a miner’s share of the global hashrate diminishes, leading to a smaller portion of the daily Bitcoin rewards. VanEck analysts Nathan Frankovitz and Matthew Sigel explained this challenge as the “melting ice cube problem,” noting that historically miners relied on equity markets rather than debt to cover the significant capital expenditures.
The shift toward debt financing is driven by the uncertain revenue streams miners face, which depend almost entirely on the volatile price of Bitcoin. Debt financing, being generally cheaper than equity, has allowed miners to better manage their capital costs.
Industry reports such as The Miner Mag highlight that combined debt and convertible-note offerings by 15 public miners have fluctuated significantly—from $4.6 billion in Q4 2024 to $200 million at the start of 2025, jumping to $1.5 billion in Q2 2025.
In response to the April 2024 Bitcoin halving—which cut mining rewards to 3.125 BTC—many miners have diversified by shifting energy capacity to AI and high-performance computing (HPC) hosting services. This strategic pivot provides them with predictable cash flows through multi-year contracts, enabling easier access to debt markets and reducing reliance on Bitcoin’s price swings.
For example, Bitfarms recently raised $588 million via convertible notes earmarked for HPC and AI infrastructure in North America, while TeraWulf secured $3.2 billion through senior secured notes to expand its data center operations. IREN also closed a $1 billion convertible note offering for general corporate use.
Despite the shift toward AI hosting, analysts assert this trend does not threaten the Bitcoin network’s hashrate. On the contrary, leveraging excess electricity for Bitcoin mining in remote or developing energy markets subsidizes data center development, promoting a net positive impact on the network’s security.
Moreover, AI demand for computing power fluctuates throughout the day, allowing miners to optimize energy use and explore new ways to monetize excess electrical capacity. Some miners even consider reducing or eliminating expensive backup power sources, such as diesel generators, by balancing workload demands between AI services and Bitcoin mining.
This emerging synergy between Bitcoin mining and AI infrastructure marks an innovative step toward maximizing both financial and electrical efficiencies in the industry.
Read the full article here: https://cointelegraph.com/news/bitcoin-miner-debt-surges-ai-hpc-expansion